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Netflix movie downloads delayed

Netflix is delaying the launch of its movie download service due to licensing …

Netflix fans hoping to get their movies over the Internet rather than the US Mail will have to wait indefinitely, as the popular movie-rental service says it is postponing testing and launch of the service. Citing the difficulty in getting distribution licenses from the studios, the company says it will instead concentrate on getting the infrastructure in place once those elusive license agreements are signed, sealed, and delivered.

It was just over a year ago that TiVo and Netflix fans were titillated by the news that the two companies would be banding together to offer movies over broadband. Under terms of that agreement, TiVo owners would have the ability to receive Netflix movie rentals over broadband. The service would keep customers' rental queues a-movin', as it would eliminate the wait for DVDs to traverse the distance between their homes and the nearest Netflix distribution center. It would also ameliorate one point of pain for Netflix: the frenzied rush for popular new releases. Instead of having to worry about inventory levels, an online distribution service would allow Netflix to get popular new releases to as many of its customers that wanted to see them.

Although it has been just over a year since Netflix announced its plans, the motion picture industry has seen a number of challenges arise during that period. First off is MPAA's increased preoccupation with movie downloading. Late last year, the MPAA sued a number of networks, and has been successful in bringing a handful of them down. The proliferation of ever-faster broadband connections coupled with the popularity of BitTorrent and other peer-to-peer networks seems to have made the movie industry a bit edgy when it comes to licensing content for download, and the studios will want to ensure that whatever DRM is used for the Netflix download service will be locked tighter than Steve Jobs' lips the night before a special event.

Just as important is the state of movie distribution. 2005 is shaping up to be one of the worst years in recent memory for movie attendance, as would-be moviegoers have been turned off by crappy movies and high ticket prices. So if your would-be customers don't want to drop a sawbuck to go to the movies, it's time to rethink things like DVD release windows and distribution models. The proliferation of portable devices like the PSP, new iPod, and other small video players capable of playing movies is another source of pressure on the content creation industry to reexamine how it gets its products in front of consumer eyeballs.

Movie downloads are currently available from Cinemanow.com, although that company lacks the consumer mindshare that Netflix enjoys and the movies are playable only on a standalone PC or Media Center box hooked to a TV. Microsoft's recent update to its Windows Media Center Edition should provide another avenue for online distribution, and the company already has distribution deals in place with a number of providers. With the ability of MCE to meld the PC and TV together, the time is right for the studios to begin embracing new models.

Netflix's movie download service will launch eventually, once the movie studios get a better grasp of how the movie-watching public's habits have changed. One would think that this year's box office numbers would be sending a clear message to the studios, nudging them in the direction of getting their content to the customers in any way possible. But then again, the entertainment industry always seems to be slow on the uptake when it comes to new technology.

Eric Bangeman
Eric has been using personal computers since 1980 and writing about them at Ars Technica since 2003, where he currently serves as Managing Editor. Twitter@ericbangeman